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Monday, December 28, 2009

Monday updates

After the close, The SPX made a new high for the day, and now the Bollinger bands have tightened back-up, look for a large move coming soon. On the sell-off right after the open it counted out as 3 waves down, so most likely it was corrective wave with higher highs to come. I am still not comfortable with any of the possible short-term counts having high likelihoods, so I am still relying heavily on the technicals. The trend is still up until we start making lower lows, but I am seeing bearish divergences appearing in the longer term charts.
Levels to watch are 1130.22 for new highs, with 1124.06, and 1119.40 signaling lower lows are being made, a bearish sign.
Breadth for the day was 1.05:1 advancers, as this rally continues to weaken, ie. the number of advancing issues per day keep making lower highs for the last two month while the indexes are making new highs. Simply put, less stocks are carrying the market to new highs
Volume for the day, was so light, I am having trouble finding any. If fact it was the lowest of the year, if you do not include the half day before Christmas.

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11:45, The SPX is starting to break down now moving to the weaker bullish fan lines


7:11, It is starting to look like an extended 5th playing out, if so we should see a reversal very soon. Divergences are also showing up on the indicators meaning the main part or strength of the wave is over and now nearing the end.
6:54, The VIX also opened gap-up.
6:45, The indicators on the charts are starting to show over-bought conditions this morning after a gap up open. Breadth is only 2.17:1 advancers, not a very strong rally with the low volume.

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